Over the past five years, shares of Apple (AAPL 0.76%) have produced a total return of 114% (as of March 27). That notable gain exceeds the performance of the S&P 500 index. This trend is nothing new for this "Magnificent Seven" stock.
Let's now turn our attention to the future. Where will Apple be in five years?
Image source: The Motley Fool.
Apple's competitive position won't change
All the coverage Apple has received that it's falling behind in the artificial intelligence (AI) race definitely provides a reason for investors to be bearish on the company's prospects. I think this is a flawed view. In my opinion, Apple will still be a dominant force in the world of technology five years from now.
That's because with its more than 2.5 billion active devices, it has a distribution edge that other companies can only dream about. These hardware products continue to be incredibly popular, especially the iPhone. This single lineup raked in $85 billion in revenue during the fiscal 2026 first quarter (ended Dec. 27, 2025).
What's more, Apple has a robust brand name that supports ongoing pricing power. It has a loyal customer base. And its profits are incredible. In fiscal 2025 alone, Apple brought in $112 billion in net income. This is easily one of the highest-quality businesses out there.
NASDAQ: AAPL
Key Data Points
Shares could perform in line with the S&P 500's long-term average
Investors can follow a straightforward exercise to try and figure out where Apple's stock price will be in late March 2031. It's important to consider both the valuation and profit gains.
Apple shares current trade at a price-to-earnings ratio of 31.5. I believe it's reasonable that this multiple could drop to 30 in five years, which is still a premium valuation.
On the other hand, sell-side analysts hold a consensus view that diluted earnings per share will rise at a compound annual rate of 11.6% between fiscal 2025 and fiscal 2028. If we assume that this pace of growth continues in the years after this explicit forecast period, then Apple's stock price will be around $410 in five years. This translates to a 10.5% annualized gain.
This is obviously a very rough guide that may or may not prove to be correct. Apple's earnings could surprise to the upside or disappoint to the downside. And market sentiment is also extremely unpredictable, which will impact the stock's valuation.
That expected rate of return mimics the S&P 500's long-term average. But if the widely followed benchmark keeps up its performance from the past decade, then Apple will lag the market.
